Moody’s gives Rayonier notes B3

Moody's Investors Service said it assigned a B3 rating to Rayonier Advanced Materials Inc.'s planned $325 million of senior secured notes due 2028 but downgraded RYAM's outstanding senior secured notes to B3 from B1. Moody’s cut the rating on the outstanding notes because the secured notes now comprise the bulk of the capital structure.

The agency also affirmed the company's B3 corporate family rating and B3-PD probability of default rating. The company's speculative grade liquidity rating remains unchanged at SGL-2. The outlook was changed to positive from stable.

RYAM will use the proceeds to refinance its $334 million of senior unsecured notes due June 2024. Pro forma for the transaction, RYAM will have two classes of debt, the priority-ranking $200 million ABL credit facility due 2025 and $800 million, currently outstanding, B3-rated senior secured notes due 2026 and 2028.

"The positive outlook reflects our expectation for EBITDA growth to support deleveraging toward 5x; however, we recognize there is some execution risk to achieve this," said Aziz Al Sammarai, a Moody's analyst, in a press release. "The proposed refinancing transaction enhances RYAM's maturity profile and the company's improved reliability will support a more stable operating performance."

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